EARLY DAY MOTION 797 - UMBRELLA COMPANIES

I have signed Early Day Motion 979 on Umbrella Companies. 

That this House is concerned that construction workers forced to operate via umbrella companies need to brace themselves for a sharp reduction in take-home pay following the Chancellor of the Exchequer's Autumn Statement on 25 November 2015; notes that hidden in the 154 page document is the decision to ban workers employed via umbrella companies from receiving tax relief on their expenses, and that this change will take effect from 6 April 2016, meaning that from 2016-17 workers operating via an umbrella company will have to pay employer's national insurance, employee's national insurance and income tax on all of their eligible earnings, which is 45 per cent of their pay; further notes that, under the present arrangements, expenses for travel and subsistence form part of a worker's pay and therefore they avoid paying tax and national insurance contributions on this element of their income, and that a worker claiming £50 of expenses per week will see their pay fall by £22.50 per week, or £1,170 per year; believes that legitimate expenses should be paid on top of pay and not used to bulk out wages; considers that construction workers are already losing large amounts of money by being forced to operate via umbrella companies after they are recruited by employment agencies; regrets that Government policies do nothing to change that relationship; and further considers that a ban on exploitative umbrella companies is long overdue in construction and other sectors.

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